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A. Pre-bid Conference
Q.1 Can the consultants request for a pre-bid conference at the
earliest possible date, with a presentation on the existing
accounting, costing and suburban models currently operational in
the Indian Railways
Ans. It is too late to arrange a Pre-bid Conference (we have
mailed our RFP to your firm on 24th of June 2004). Even if we
wish to arrange a Pre-bid meet at the request of firms, we have
to provide sufficient time for others to participate.
International travel arrangements for other firms generally
takes a period of 3 weeks.
Moreover, ADB procedure for responding to the bids are elaborate
and are well known (This is available on ADB website, as you
must be aware. Any way, the Link is www.adb.org/Documents/Handbooks/Consulting/Vol_1/Consulting_Services.pdf
). Therefore, we do not find any justification/find it feasible
to call for a Pre-bid Conference from our side.
B. Implementation of the Project
Q.1 What will be the scale of implementation that the
consultants will have to support
Ans. Clarification to Query No.1&2 of Part II under sub-section
'Clarification 2' under 'Tender Page' section of our website
www.accar.org may be referred to.
Q.2 What is the definition of 'the unit' on which the
implementation has to take place, Is it defined as a division, a
zone, a workshop or a production unit.
Ans. For the purpose of implementation the unit may be defined
as a Zone/Production Unit/selected divisions and workshops.
Q.3 Which are the 25 likely locations for the implementation of
the project.
Ans. The representative locations cover all Zonal Headquarters
and Production Units and a few Divisions and Workshops. A list
of locations is available in the organizational structure of our
website www.accar.org.
Q.4 What is the definition of person months as stated in the
Terms of Reference.
Ans. A person month covers a period of one month spent by the
expert on the assignment. (Any firm which deals with consultancy
should be aware of such terms, we presume.)
Q.5 How the person months different from the 38 months period
defied in the Terms of Reference.
Ans. The 38 months period is the project duration while the
total person month requirement is the estimated sum-total of
requirement of individual experts in terms of number of months
on the assignment.
Q.6 Are the person months stated in the RFP, representative of
the time to be spent individually by each expert or is it for
the team as a whole.
Ans. The person months for each expert as given in the staffing
schedule is requirement for that category of expertise while the
total number of person months required for the project is
requirement for the team as a whole.
C. Existing Accounting Design
Q.1 What is the existing accounting architecture design of the
IR
Ans. The existing accounting architecture of Indian Railways is
activity based functional classification which may be referred
to in sub-section 'Accounting System' under section 'Accounting
Framework' of the website. Broadly, the revenue stream include
coaching services, freight services, other coaching services and
sundry other earnings. The revenue expenditure stream include
expenditure through spending units organized in form of
departments like General Administration, Civil Engineering
Department (for track and civil structure), Electrical
Engineering Department, Mechanical Engineering Department, S&T
Department, Commerce Department, Operating Department and
services departments like Accounts, Personnel, Stores, etc.
Accounts are compiled at the base unit level like division and
workshop and consolidated at each Zonal Railway. Zonal Railways
publish their annual financial Accounts consisting of block
account, balance sheet and profit and loss account. Accounts of
Zonal Railways and other units under Ministry of Railways are
further consolidated at the ministerial level and annual
financial accounts prepared and published consist of block
account, balance sheet and profit and loss account. The
compilation of accounts is based on detailed rules of allocation
incorporated in Finance Code of Indian Railways.
A separate set of accounts is prepared for capital expenditure
on Indian Railways, the vertical compilation of which is the
same as the revenue accounts. You may like to refer to our
official publication such as Accounts Codes and Finance Codes
which are available for sale at well-known book shops dealing
with Government Publications. Any way relevant chapters of these
Codes/Manuals have been given a link on our website under
section 'Accounting Framework'.
Q.2 What is the system of accounting followed by IR
* Cash based accounting
* Accrual Based accounting
* Hybrid system of accounting
Ans. Indian Railways is following cash based accounting, which,
through the use of linked accounts known as suspense heads,
meets the requirement of accrual-based accounting. Government
has constituted a Government Accounting Standards Advisory Board
(GASAB). GASAB is expected to announce its policy about
migration to accrual based system or not by the end of this
year.
Q.3 Does the internationally accepted accounting standards mean
the:
* IGAAP
* UK GAAP
* US GAAP
* IAS
If not, then has the IR earmarked certain internationally
accepted accounting standard for compliances.
Ans. No. Indian Railways has not specifically earmarked any
specific accounting standard so far for compliance. IR will
adhere to the relevant accounts standards prescribed by GASAB.
For Railway Traffic Accounting, which is a specialized field, IR
may attempt to frame an internationally accepted accounting
standard with the help of the Consultants and approach GASAB
with a draft exposure document.
Q.4 What is the accounting basis used by the CGA for the
accounts
Ans. CGA is using cash based system for accounts.
Q.5 How are the accounts complied by the railways consolidated
in the principal accounts offices of the CGA
Ans. This is not part of this assignment. However, the reports
and statements of accounts to be sent to CGA are prescribed and
form part of the assignment.
Q.6 What are the constituents of the 5 major segments of the
railways service providers for which the accounting separations
in terms of the following:
* Sub activities/Services
* Revenue
* Cost
Ans. The consultant is expected to design the constituents of
different segments as also allocation of revenues and costs
among the different segments.
D. Audit Comments
Q.1 What sort of assistance would the IR like in the review of
the audit comments
Ans. No assistance is being sought for by IR in the matter of
audit comments. It is expected of the consultant to
comprehensively go through comments made by audit on periodical
accounting statements, maintenance of subsidiary books as well
as annual final accounts of Indian Railways, particularly in
context of deficiencies/inadequacies, and factor in the same
while redesigning/reformatting the Proposed Accounting System
for IR.
E. Existing Budgetary procedures
Q.1 What are the assumptions on which the budgetary estimation
is done by the field units/Zonal units
Ans. Briefly, following factors are required to be considered
for budgetary Estimation by the field units/zonal railways :
1. Throw forward from the previous year;
2. All expenditure, whether in cash or by transfer, the
liability for which already exists, but which is not likely to
be distributed evenly during the year, whether it is of a
periodical nature, or because it is contingent on the receipt on
supplies, or for any other reason;
3. Expenditure which is practically fixed and evenly distributed
throughout the year;
4. Other expenditure which is likely to be incurred during the
year but liability for which have yet to be incurred; and
5. The need to keep some amount as a reserve for meeting fresh
and unanticipated expenditure.
It may be stated here that past actuals play a significant role
in budgetary estimation.
Q.2 How are the Budgetary grants linked to the budgetary
estimation.
Ans. Budgetary grants do take into account budgetary estimation
made by individual units. However, it is clarified that
budgetary estimation is not the sole factor in fixing budgetary
grant for a particular unit under a particular item. Please
refer to accounting framework section of our website.
Q.3 What are the reports generated to monitor the use of the
grants
Ans. There are a number of reports generated to monitor the use
of the grant both at base unit level like division and workshop
and also at zonal unit level. These reports are also received at
the apex level i.e. Ministry of Railway for periodic monitoring.
The specific formats of the reports will be made available to
the selected consultants in the course of the study of the
system.
F. Traffic Accounts
Q.1 Why are Division sheets not being prepared for the
traffic revenue interchanged between within the IR, while they
are being prepared for the traffic revenue exchanged with
deposit private companies
Ans. Para 3222 of sub - sub-section 'Earning Accountal' in
'accounting system' sub-section under 'Accounting Framework'
section of our website www.accar.org may be referred to.
Q.2 As the Division Sheets are consolidated at Secunderabad,
which leads to a time gap for actual accounting, how are the
revenues and expenditure accounted for during such period.
Ans. The aspect of accounting referred to in the question will
form part of the assignment as per Para 4.0 (a) at Page 58 of
the RFP document.
G. Existing FMIS, IT applications and infrastructure
For each of the applications mentioned below (from i to Vii)
please specify the following:
1. Technology/Infrastructure used (Platform, Hardware, Software,
Tools, Web/application server, Database etc.)
2. Issues faced in terms of
* Scalability
* Configurability
* Reliability
* Security
* Extensibility and
* Performance
3. Level of integration with other applications and method of
integration
4. Detail about the Application Architecture (J2EE or .NET etc.)
5. Bandwidth requirement
6. Number of users (current as well as expected/projected)
7. How is the application maintained (AMC's and level of
support)
8. What is the kind of hardware/networking infrastructure being
used for the applications
9. What are the connectivity options
10. Current software tools and licenses being used
1. Financial Management Information System (AFRES)
2. Payroll and independent Modules (PRIME)
3. Material management Information System (MMIS)
4. Passenger Accounting System (PAS)
5. Freight Accounting System (FAS)
6. Operating Statistics System (OSS)
7. Personnel Management Information System (PMIS)
Ans. The selected team which is awarded with the Consultancy
will get adequate time to have an over view of FMIS.
Q.2 At what level of implementation are the above applications
(from i to vii)
Ans. The table in sub-section 'Clarification 3' may be referred
to under section 'Tender Page' of our website www.accar.org
Q.3 What is the extent of computerization at the division and
zonal level within the accounting
organization framework? Is there any guideline/policy for the
same.
Ans. At present, accounting work of a few selected divisions and
6 zones have been computerized with the use of a customized
software. This is being ported in other zones of IR.
Further, Answers to Query 2(a) and 4(b) under 'Clarification 3'
of our website ('Tender Page' section) may be referred to.
Q.4 What are the types of online (real time) reports envisaged
using the new system
Ans. This is a task to be performed by the Consultant.
Q.5 Kindly specify the high-level network diagram and typically
what is the extent of
networking and bandwidth available to the locations within the
accounting system
framework?
Ans. The successful Consultant will get ample time to study this
while performing Task b at page 59 of the RFP document.
H. Existing LOB/LOS and profit centers of the Railways
Q.1 Which are the existing LOB/LOS of the railways
Ans. This is the major task to be performed by the successful
consultant upon engagement. Please read our TOR and Key drivers
statement in the RFP once again.
Q.2 How is the revenue and cost recorded for the existing
LOB/LOS
Ans. Refer to answer above.
I. Existing costing Module
Q.1 What is the existing costing model in place at the IR
Ans. The existing costing module of Indian Railways is based on
fully distributed costs. We have a good Costing System now in
IR. The Consultant assigned with the work will get ample time
and opportunities to study our elaborate Costing Manuals and
suggest desirable changes and improvements as per the
requirements of various stake holders within IR.
J. Suburban Accounting Model
Q1 What is the existing accounting model of the Suburban
railways
Ans. Presently, the suburban railway accounts are part of
accounts of the jurisdictional zonal railways. However, a
identification of certain items and costs pertaining to suburban
railways is provided for in the existing functional
classification, referred to in the section 'Accounting
Framework' of our website. Consultant with their vast experience
and expertise is expected to suggest improvements.
Q.2 How far is it accounting decentralize for the suburban
railways
Ans. The accounts of suburban railways are not separated
formally. These are part of the accounts of the division on
which the suburban trains are operated. Formal separation is an
important task to be performed by the consultant.
Q.3 Is the hybrid system of accounting followed vis-vis accrual
based accounting
Ans. The accounting system for the suburban section follows the
same principles as that of non-suburban section i.e. accounting
policies are uniform for both suburban and non-suburban section.
Q.4 Does it have LOB/LOS defined
Ans. The definition of LOB and LOS is one of the main
assignments of the consultant.
Q.5 What are the accounting classification/ chart of accounts
followed by them
Ans. As stated earlier, the same accounting classification is
applicable for both the suburban and non-suburban services.
However, a clear identification of major items of expenditure as
well as of earnings for suburban section is provided for in the
existing functional classification referred in the accounting
framework section of our website. Selected consultant will have
ample time to study this, while performing the assigned Tasks.
Q.6 How are the financial statement consolidated with the IR
financials
Ans. As stated earlier, the revenues and costs pertaining to
suburban section are part of the accounts of Indian Railways
now. Separation and consolidation of suburban financial
statements will be required as per segmental accounting needs of
IR. However, for IR, the Suburban System Accounting will be
integrated with the Financial Statements.
Q.7 How is the cost of the common services allocated
Ans. Detailed guidelines have evolved over years based on
performance parameters as well as surveys conducted for
allocation of common costs between suburban and non-suburban
section. Consultant will have to fine-tune several aspects on
this issue.
The examination of the basis and underlying principles of these
allocations of common costs is part of the assignment and is
required to form part of the recommendations to be made by the
consultants.
Q.8 With the launch of MRVC as a separate SPV will the
transactions relating to the use of common facility be treated
as inter company transactions
Ans. Please refer Task 3 (Page 60 of the RFP document) of the
Terms of Reference.
Q.9 What is the costing module followed by the suburban railways
Ans. There is no separate costing module followed for the
suburban railways. As stated earlier, the existing costing
module is based upon fully distributed costs.
Q.10 What is the current subsidization policy being followed by
IR
Ans. Subsidization Policy is not part of the TOR.
Q.11 What rate of return should be charged on the capital
included in the cost estimates
Ans. This would form part of the recommendations to be made by
the consultant.
K. Pricing of Cost Center Based Services
Q.1 Which are the Cost center based services in the Indian
Railways
Ans. This is a task to be performed by the Consultant.
Q.2 Why have they been assigned as a cost center basis
Ans. We wish to hear this from the appointed consultants while
making their recommendations.
Q.3 Is the cost of these services currently built into the
passenger and freight fares
Ans. Yes.
Q.4 What will be the relevance of introducing the pricing for
these centers
Ans. Relevance of transfer pricing needs no explanation.
Q.5 Is there a concept of inter departmental pricing already in
place at the IR
Ans. Yes. But we will need competent advisories from the
appointed consultant.
Q.6 Which are the departments for which inter departmental
pricing is used
Ans. This has been covered in the reply to Query 5 above. |
